When To Stop Trying to Increase Available Credit?

[tenbee]

Disclaimer: I've read 4-5 online articles and looked at a couple of threads about this topic.

I have 6 CCs and am wondering if I should continue to apply for cards to increase my total available credit  to reduce my utilization %. How do you decide when to stop getting cards?

Credit Union $5K - $0 balance

Amex - $5K - $0 balance

BB - $1K - $0 balance

Macy's $1K - $0 balance

Chase - $6K - $0 balance

Chase - $2K - $1K balance (but paid in full monthly)

Credit Union $3K - $2500 balance (recurring, but low interest after a recent cross country relocation)

 I'm handling all of these considerably well (at least I think so) and my credit is "good" (690-730 range).

I'm primarily concerned about my utilization percentage because in 2 years I'll need to drop ~$5K on interviewing for postgraduate positions across the country and it's looking like that's going to be on one of these wonderful CCs.

Any input/adivce is always appreciated.

[Stanic413]

I decide to stop getting cards when I don't need or won't use them.  If you're trying for a card to lower utilization (or because they're shiny and new, lol), I say hold off and pay down some of your debts.  If you're trying to get a card to get rewards because you know you'll be traveling and could use the benefits, etc then it's worth applying for.  Just my $0.02. 

[weehoo]

Stop getting cards, but never stop increasing credit limits!

[chwebb1]

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@Stanic413 wrote:

I decide to stop getting cards when I don't need or won't use them.  If you're trying for a card to lower utilization (or because they're shiny and new, lol), I say hold off and pay down some of your debts.  If you're trying to get a card to get rewards because you know you'll be traveling and could use the benefits, etc then it's worth applying for.  Just my $0.02. 

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I think that that's a very fair assessment. The only other time I'd app for anything is if you want to increase the CL on one of your frequently used accounts, and they require a HP to do so. Obviously, if it's a "I use this once or twice a month" kind of card, it's likely not worth the HP. But if it's a near daily spender, it likely will be.

[Anonymous]

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@weehoo wrote:

Stop getting cards, but never stop increasing credit limits!

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There's a time to stop doing this as well!  At least some lenders will eventually pay attention to (first) their exposure to you and then to total CL, and decide not to extend more credit.  This is bad if it prevents you getting a card you really want/need.

For most, the difference between having a CL of $15K or a CL of a $20K, on a lightly used card, is very very small.

[xsvspd]

Not sure if suggesting this is against TOS on the forum, but here goes. Some banks that you already have accounts with will allow you to open a new account, and transfer some of the limit to other accounts with the same bank; i.e. Open a Chase Sapphire, transfer some of the limit to, say, a Chase Freedom card you already have, and close the Sapphire account, if you don't want more cards. You take a hit for the inq and AAoA, but ultimately, it's up to you on how many cards is too many.

[TimeToRecover]

well i am going to be the speaker of gloom here but:

Applying for cards only to increase utilization can be a very slippery slope.  If you can't pay down what you have then there is an issue.  

I think a good rule is "only apply for credit that you need"  Do you NEED that 3rd american express card?  Do you NEED card X cause it is sparkley?  or is it I need a card with a chip that will allow me to charge when out of the country?  There is a big difference between NEED and WANT.  

I think many of us that have had some issues in the past initially start getting cards to help improve our score and to rebuild credit.  People need to think though have they completed their rebuilding and now need to stop.  There is truly no need to get a new card every 6 months like so many on this board seem to promote.  (OK GET THE WHIP NOW I SAID IT)

[bch238]

Since the general consensus is that global and per-card utilization < 10% is ideal, you shouldn't need much more credit than 10x your average monthly credit card spend.  So if you spend $5K per month, you would want to have about $50K in credit.

[xsvspd]

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@bch238 wrote:

Since the general consensus is that global and per-card utilization < 10% is ideal, you shouldn't need much more credit than 10x your average monthly credit card spend.  So if you spend $5K per month, you would want to have about $50K in credit.

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That's probably the best way I've ever heard of anyone putting it. And it makes perfect sense! Wish I would have thought of it! I'm certainly going to follow it!

[Anonymous]

TimeToRecover - sobering message! Thanks for reminding....